Market changes
On April 29, the market rose sharply, of which the Shanghai stock index closed up 2.41% and the gem index closed up 4.11%. At the industry level, growth industries such as media, computer, military industry, new energy and electronics led the rise.
The warm tone of the Politburo meeting and the strong rise of U.S. stocks overnight eased the internal and external contradictions in the early stage of the market at the same time, boosting the sharp rise of the market
The reasons for the sharp rise in the market mainly come from: ① the warm wind of the Politburo meeting dispelled the market's concern about the uncertainty of the annual economic growth target. On the afternoon of April 29, the notice of the meeting of the Political Bureau of the CPC Central Committee was released. On the one hand, the meeting requested to strengthen macro policy adjustment and strive to achieve the expected goal of economic and social development for the whole year. The economic growth target of 5.5% was continued to be confirmed, sweeping away the previous concerns about the market's attitude towards steady growth. The two sides require further stability maintenance in some risk areas, such as rigid real estate support and improved housing demand, which has strongly boosted the risk appetite within the market; ② At the stock market level, we will continue to reduce the transfer fee by 50% and restore confidence in the stock market. Csdct announced that from April 29, CSDCC will reduce the overall stock transaction transfer fee by 50%, from the current two-way charge of 0.02% of the transaction amount for A-Shares in Shanghai and Shenzhen market and 0.025% of the transaction amount for A-Shares in Beijing market and shares of listed companies to 0.01% of the transaction amount. The overall reduction of transfer fee further highlights the efforts of the policy level to stabilize market confidence; ③ The strengthening of the expectation of the future monetary tightening rhythm of the Federal Reserve came to an end, and US stocks rose strongly overnight. The decline of US economic data in the first quarter exceeded expectations, and the expectation of strengthening the monetary tightening of the Federal Reserve may come to an end temporarily. The yield of 10Y US bonds continued to peak and fall. US stocks rose strongly overnight, especially the NASDAQ index rose by more than 3%, which slowed down the inhibitory effect on the growth sector, and the growth of A-share growth industries ranked first.
Concerns about the internal steady growth policy have been eliminated, and the oversold rebound has been preliminarily confirmed. It is expected to further open the rebound space after the interest rate meeting of the Federal Reserve
The continuous adjustment of the market in the early stage is mainly due to the continuous strengthening of the monetary tightening expectation of the external Federal Reserve and the uncertainty of the internal annual economic growth target. In the market review "preliminary confirmation of oversold rebound after emotional decline" on April 27, we proposed that the meeting of the Shenzhen Reform Commission is expected to be a prelude to the meeting of the Political Bureau of the CPC Central Committee to adhere to the annual economic growth target, which will alleviate the recent market concerns about China's short-term core contradictions. Now it has been confirmed by the Political Bureau meeting. In the early stage, one of the two core contradictions to curb the short-term market has been eliminated, and the oversold rebound of the market has been confirmed.
For the core contradiction of 10Y US bond yield, there are also signs of sustained release in the near future. On the one hand, the yield of 10Y US bonds peaked and continued to fall, which means that the expectation of monetary tightening of the Federal Reserve, which has been continuously strengthened in the early stage, has come to an end temporarily, which will be a direct relief to US stocks, especially Nasdaq, and thus an indirect relief to the inhibition of peripheral risk appetite of a shares, especially growth sectors; On the other hand, the US economic data released yesterday is weaker than market expectations, which will further strengthen and strengthen the just stable expectation of monetary tightening of the Federal Reserve, which is also conducive to the further downward release of risks in the yield of 10Y US bonds. In the follow-up, we need to pay attention to the Fed's interest rate meeting on May 5. If the statement is no longer tough hawks after the monetary tightening is implemented, the 10Y US bond yield is expected to confirm the inflection point downward, and the oversold rebound of A-Shares will be further confirmed. At the same time, it is also expected to further open the rebound space, and growth is also expected to lead the rebound market.
Growth is expected to lead the rebound, stabilize growth, show more cost performance and return to the main line of allocation
With the gradual confirmation and elimination of the core contradictions caused by internal and external concerns about the market, the steady growth sector and growth sector are expected to return to the main line. Industry configuration suggestions focus on three main lines. Main line 1: steady growth chain is still one of the main allocation directions. Especially after the meeting of the Political Bureau of the CPC Central Committee adheres to the annual economic growth and eliminates the concerns of steady growth policy, we can pay attention to building materials, building decoration, steel, cement, water conservancy and hydropower construction, real estate chain (there are still opportunities for the leaders of state-owned enterprises and central enterprises to improve their concentration) and banks. Main line 2: if the yield of U.S. bonds falls after peaking periodically, the growth sector will usher in the opportunity of oversold rebound, focusing on power equipment, electronics, military industry, media, communications, computers, etc. Main line 3: consumer goods must be selected. The transmission of PPI to CPI is accelerated. Under the situation of epidemic prevention and control, the reserve of consumer goods must be selected is increased. Attention is paid to food processing, meat products, dairy products, condiments, grain, oil, rice noodles, small household appliances and other subdivided fields.
Risk tips
The development of Omicron mutant strain exceeded expectations; Risk Spillover of geopolitical conflict between Russia and Ukraine; The uncertainty of the Fed's interest rate hike path has increased; China's policy is not as strong as expected.
